Early Look

Wednesday, January 10, 2024

U.S. futures are looking flat, with the S&P (Spuz) trading in the middle of its overnight range (4,804 high and 4,786 low), as market participants await fresh inflation data tomorrow morning in the form of December consumer prices (CPI) for the next clue to interest rates moves by the Fed. Optimism surrounding interest rate cuts had driven much of the rally towards the end of 2023 and continues to be the primary driving force again into 2024 with high expectations of rate cuts by the Fed as soon as March, especially with another tame CPI report tomorrow. Investors also await bank earnings this Friday from JPM, Citi, Wells, and others in the unofficial start of Q4 earnings season. The S&P 500 and Dow both lost ground and closed lower on Tuesday, pressured by a modest rise in Treasury yields, but strength in mega tech names NVDA, AMZN, AMD, GOOGL, softened the blow. Investors are bracing this week for more Treasury supply along with the CPI, PPI, and bank earnings. Most of the 11 major S&P sectors fell on Tuesday, with Energy leading to the downside. Stocks had rallied on Monday, with the Nasdaq and S&P 500 scoring their first daily percentage climbs of more than 1% since Dec. 21. In Asian markets, The Nikkei Index jumped 678 points to 34,441, the Shanghai Index fell -15 points to 2,877, and the Hang Seng Index declined -92 points to 16,097. In Europe, the German DAX is down about -14 points to 16,675, while the FTSE 100 slips -25 points to 7,658.

• The Dow Jones Industrial Average fell -157.85 points, or 0.42%, to 37,525.16.
• The Nasdaq Composite gained 13.94 points, or 0.09%, to 14,857.71.
• The Russell 2000 Index declined -20.97 points, or 1.05% to 1,968.03.

• 10:00 AM ET                Wholesale Inventory M/M for November
• 10:30 AM ET                Weekly DOE Inventory Data
• 1:00 PM ET                   US Treasury to sell $37B in 10-year notes.
• 3:15 PM ET                   Fed’s Williams Gives Speech on 2024 Economic Outlook

• Earnings After the Close: RELL SGH WDFC

• Consumer Electronics Show (CES), 1/9-1/12, in Las Vegas, NV
• ICR Conference, 1/8-1/10, in Orlando, FL
• JP Morgan 42nd Annual Healthcare Conference, 1/7-1/11, in San Francisco, CA

• Home Depot (HD) upgraded to Outperform from Neutral at Wedbush.
• Lennar (LEN) raises the annual dividend to $2.00 from $1.50 per share and increases its stock repurchase program by $5B.
• PriceSmart (PSMT) Q1 adj EPS $1.24 vs est. $1.09 on revs $1.17B vs est. $1.158B; comps +8%.

• AZZ Inc. (AZZ) forecasts FY adj. EBITDA $315M to $335M, above prior forecast $300M to $325M and boosted its FY sales view to $1.45B to $1.55B, from prior $1.4B to $1.55B.
• Boeing (BA) CEO Dave Calhoun acknowledged errors by the company as more than 170 jets remained grounded for a fourth day, telling staff the company would ensure an accident like the mid-air Alaska Airlines panel blowout "can never happen again."
• WF-40 (WDFC) Q1 EPS $1.28 vs est. $1.05 on sales $140.4Mm vs est. $134.37Mm; guides FY sales $570-600Mm vs est. $574.77Mm, EPS $4.78-5.15 vs est. $5.09.

• Ault Alliance (AULT) announced that the Company has decided that it will start holding up to 20% and minimum of 5% of the Bitcoin it mines on the Company’s balance sheet.
• BlackRock (BLK) and Ark Investments said they were lowering the fees on their proposed spot bitcoin exchange traded funds. BlackRock would charge 0.25%, compared with the 0.30% fee set earlier. Ark Investments and 21Shares lowered their fee to 0.21% from 0.25% earlier.
• Cohen & Steers, Inc. (CNS) preliminary assets under management of $83.1B as of December 31, 2023, an increase of $4.4B from assets under management at November 30, 2023. The increase was due to net inflows of $61M and market appreciation of $4.8B, partially offset by distributions of $408M.
• Netstreit (NTST) 9.6M share Spot Secondary priced at $18.00.
• UWM Holdings (UWMC) downgraded to Underperform from Market Perform at Keefe Bruyette.

• Intuitive Surgical (ISRG) preliminary Q4 revenue $1.93B vs. est. $1.87B and said placed 415 da Vinci surgical systems in the fourth quarter of 2023, compared with 369 systems in the fourth quarter of 2022; says Covid has had int he past and could have in the future an adverse impact on the company’s procedural volumes; expects worldwide da VINCI procedures to increase approx 13-16% in 2024.

• Aehr Systems (AEHR) Q2 adj EPS $0.23 vs est. $0.19 on sales $21.431Mm vs est. $20.89Mm; guides FY revs $75-85Mm vs est. $103.13Mm and GAAP net income 20-25% of revs.
• ChipMOS (IMOS) reported Q4 revenue that increased 22.2% from the fourth quarter of 2022 to $187M, representing an increase of 2.6% from the third quarter of 2023.
• E2open Parent (ETWO) Q3 adj EPS $0.04 vs est. $0.04 on revs $157.5Mm vs est. $154.26Mm, adj EBITDA $55.4Mm vs est. $51.96Mm; sees Q4 GAAP subscription revs $131-134Mm; sees FY adj EBITDA $215-220Mm vs est. $216.95Mm.
• Smart Global (SGH) Q1 EPS $0.24 and sales fell -41% y/y to $274.2M; forecasts Q2 net sales $260M to $310M and EPS $0.15-$0.35; board of directors approved a $75 mln share repurchase authorization.
• Taiwan Semi (TSM) said Q4 revs came in at T$625.5 billion ($20.10 billion) vs. $19.93B y/y; and topped its prior view of a range of between $18.8-19.6B; for December alone, TSMC reported that revenue fell 8.4% year-on-year to T$176.3 billion, which was down 14.4% compared with the previous month.